Buyback Alert: 5 Stocks to Keep in Your Watchlist

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Buyback Alert: 5 Stocks to Keep in Your Watchlist

Jun 14, 2022

Buyback Alert: 5 Stocks to Keep in Your Watchlist

When a corporation buys back its own shares from the market, it is known as a buyback. It reduces the number of outstanding shares on the market, allowing promoters to raise their ownership interest.

These shares are either cancelled or maintained as the treasury stock of the company.

Warren Buffett, one of the most successful investors of the 20th century, recently discussed share buybacks in his 2022 letter and how it can benefit shareholders.

He said that while the math of buybacks takes time to work out, it may be 'powerful over time.'

Here are five companies to add to your buyback watchlist.

#1 Cheviot

The first stock on our list is textile company, Cheviot.

In January 2022, the company bought back 250,000 of its shares at a price of Rs 1,725 per share. The shares were worth 4% of the company or Rs 431.3 m at the time.

This is not the first time the company has bought back shares. In 2020, it announced to buy back 200,000 shares at Rs 900 a piece. The buyback size was Rs 180 m.

A tender offer was used to complete the buyback. In a tender offer, shareholders can submit (or tender) a portion or all of their shares within a certain time frame and at a higher price than the current market price.

Cheviot manufactures and exports jute yarns and fabrics in India and internationally. It operates two business segments namely Jute goods and captive power generation.

To know more about the company, check out Cheviot's financial factsheet and its latest quarterly result.


#2 FDC

The second stock on our list is pharma giant, FDC.

In February 2022, the company bought back shares worth 1.72% of the total business. A sum total of 2.9 m shares were repurchased at a rate of Rs 475 per share amounting to Rs 1.38 bn. This was again carried out through a tender offer.

The company has conducted a total of four buybacks in the last five years.

FDC's first buyback was conducted in February 2018, where 340,000 equity share were bought at a rate of Rs 350 per share. The total buyback was worth Rs 1.2 bn.

The second buyback was of the same size in in 2019 and was at the same price.

The third buyback was done by the company in August 2020. Here 210,000 shares were bought back at a rate of Rs 450 per share. The size of the buyback was 6.3% of total outstanding shares.

FDC (Fairdeal Corporation) is among India's leading fully integrated pharmaceutical companies. The company is a pioneer in the manufacturing of specialised formulations, and among the world's foremost manufacturers and marketers of Oral Rehydration Salts (ORS).

To know more about the company, check out FDC'S financial factsheet and its latest quarterly result.


#3 Filatex ltd

The third stock on our list is textile company, Filatex.

The company conducted its first buyback in May 2022.

It bought back 4.25 m at Rs 140 per share. The size of the buyback was about Rs 595 m or 1.7% of total outstanding shares.

Filatex India is a small cap company in textile sector. In India, it is one of the first companies to produce Monofilament Yarns for Zippers, Tooth Brush Bristles, Velcro, Magic Fasteners, and Forming Fabrics.

All of these items are import alternatives, allowing the country to save valuable foreign currency.

The company offers products such as polyester partially oriented yarns, textured yarn, micro denier yarns.

To know more about the company, check out Filatex's financial factsheet and its latest quarterly result.


#4 Gandhi Special Tubes

The fourth stock on our list is steel company, Gandhi Special Tubes.

The company's board did a buyback in August 2021 of 766,616 shares at a price of Rs 550 per share. The offer size was 5.96% and the buyback amount was Rs 421.6 m.

Gandhi Special Tubes share buyback plans track back to 2018.

The company's board conducted a buyback in March 2018 to buy 880,000 shares at a rate of Rs 500 per share. The buyback size was 24.9%.

previously in 2019, the board proposed a buyback of 900,000 share at the rate of Rs 550 per share. The buyback offer amount was Rs 495 m while the size was 6.5% of total outstanding shares.

Gandhi Special Tubes serves a wide range of industries and specialty markets in core sectors such as automotive, tractors, earthmovers, hydraulics, and general engineering with creative and dependable tubular solutions.

To know more about the company, check out Gandhi Special Tube's financial factsheet and its latest quarterly result .


#5 Goldiam International

The last stock on our list is Goldiam International.

Goldiam International also conducted a buyback in November 2021. It bought back 380,000 shares at a rate of Rs 1200 per share amounting to Rs 456 m.

The company carried out its previous buyback in February 2020. The size of the buyback was Rs 123.6 m or 5.6% of the total shares outstanding. The company bought back the shares at a rate of Rs 160 per share.

Goldiam International is an Indian jewellery maker specialising in diamond-studded gold, platinum, and silver.

The company's main commercial activities are the production and export of studded gold and silver jewellery. Jewellery manufacturing and investment activity are the two segments in which it operates.

To know more about company, check out Goldiam International's financial fact sheet and its latest quarterly result.


Looking for buyback stock in India for 2022?

Buybacks help the share price of the company to appreciate, improving the performance of the stock.

They also help the company to improve its valuation and also increase the EPS for the shareholder.

Buybacks are usually carried out when the management of the company perceives the shares of the company are undervalued in the market. This leaves the shareholder with the hint about the long -term growth expectation of the company.

If you are looking for names of more buyback stocks, check out this video recorded recently by Richa Agarwal, Editor of the smallcap recommendation service, Hidden Treasure - 14 Buyback Alert : 14 To Keep in Your Watchlist.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

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